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I posted this in reply to another thread, but given how long I've been trying to find some info on this problem I thought it might benefit others to be able to find this quickly.

As many have also reported, my intel iMac has developed a problem where the Airport drops my network randomly, wont' remember my WPA2 or WEP passwords (I've tried different security settings as you'll see in the article below), and despite correct System:Network settings, it won't automatically connect to my home (preferred) network.